When I was a kid, every Thursday night during the summer my dad used to take all of us to a farmer’s produce market not far from our summer home on the Jersey shore. This was an old-style farmer’s market where the local farmers would load their trucks with baskets of their just-harvested fruits and vegetables and bring them to an empty lot where they’d line up in rows, unload their bushel baskets, and wait for the locals to come by and, hopefully, buy their produce.
The baskets would be marked with a hand-written sign that indicated the price the farmer was charging. And each farmer sought ways to make his (few woman were involved as I recall) fruits and vegetables look like a more appealing purchase than those displayed by the other farmers.
For example, if fresh corn was on our shopping list (as it almost always was for my dad), we might find some farmers might charging fifty cents a basket instead of the seventy-five cents most of the others were charging. (Yes, a bushel of corn went for four bits back then, but, of course, we’re talking the late 1950s.)
Or some of those charging seventy-five cents might fill their baskets so they were nearly overflowing while others only filled theirs to the rim. And some farmers peeled back the ears of the corn on the tops of their baskets to make them easier to size up, while others made the customers pull back the husks to look for themselves.
All of these different approaches were basic marketing decisions, made by the farmers to sell more of their produce than their colleagues (or, at least, to sell as much of their produce as they could, since they made nothing from the produce they had to load back on their trucks and take back to their farms).
The result was a form of competition that, on an admittedly very small scale, epitomized the classic market-driven economy. Note the basic principles at play: Supply and demand kept the prices down, since there were usually many more farmers, with much more produce, than there were potential buyers. And marketing strategies, starting with the prices charged, were of critical importance, since most of the buyers were not going to buy their corn from more than one of the farmers and most (unlike my dad, who sometimes seemed to spend hours considering his options) were not about to devote a whole lot of time to the process.
The other aspect of the old-style farmers’ markets that made them work so well was the absence of any middle-persons or corporate branding. Each farmer was an independent economic unit, free to make whatever pricing and other marketing decisions he felt brought the best results for his business. And each buyer was free to spend as much or as little time studying the options and considering whether to make a purchase from any of them.
Today’s economy is not as simple, not by a long shot. In fact, to speak of a market-driven economy in today’s world of mega-corporations and layers of wholesalers and retailers is to make a mockery of the time in America when the same person who made or grew something sold it. We aren’t that country anymore (even in the world of farming, which is now largely controlled by the agri-businesses that essentially lease the land to the individuals who grow the crops).
Thus, much of the current political cry for a return to a free-market-driven economy unrealistically fantasizes and romanticizes the term. To speak of a truly free market economy would require a return to sole proprietorships and individual entrepreneurs. But, except for a relatively small number of niche businesses (private music lessons, the quaint bed and breakfast, and maybe your local barber shop are a few that come to mind) those entities don’t exist anymore.
Instead, we are an economy built around and run by our corporations, and they are not as easily manipulated or influenced as the farmers my dad bought his corn from back in the day. In fact, today’s corn is grown by farmers who work in one way or another for a corporation that sells the corn to a conglomerate that sells it to a super market chain that then distributes it to individual franchises that sell it to folks like my dad.
But those buyers aren’t able to go to the next aisle to check out a different farmer’s basket of corn. Today’s buyers of corn (and any other edibles) go to their market of choice (usually the one closest to their home) and buy the corn that is there provided. Their only choice is whether to buy corn that day or potatoes or lima beans, not whether to buy this farmer’s corn or that one’s.
This change in our economy has occurred over the last fifty years, and it has led to a variety of problems. The first and most significant is endemic to the basic structure of a corporation. Although they are treated as human beings in the law of the land, corporations are, in fact, entirely impersonal, with decisions made by management teams that are guided by a board of directors that has as its principal motivation to maximize profits.
What we have now is a modified form of the classic free-market economy. The freedom that my dad and the farmers used to have has now been severely restricted or lost entirely. Buyers have less true freedom, because their choices are so much more limited. And the farmers (and their equivalents) in today’s world have much less freedom because they are not able to sell directly to their intended customers, let alone decide how to market their wares (such as they are).
In the absence of that direct buy-sell check on excessive profits and inadequate return, policy makers (i.e. governments) seek to intervene. Thus, health and safety measures are passed to protect buyers from the impersonal, profit-driven decisions of corporations, and regulations are imposed to keep the “corn” fresh and edible.
It isn’t a perfect economic model by any means, but given the reality of our society, it’s the best we can do.